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Overview
- Fortitech at a glance
- Acquisition rationale
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The acquisition of Fortitech Accelerating DSM s strategy to become a - - PowerPoint PPT Presentation
The acquisition of Fortitech Accelerating DSM s strategy to become a - - PowerPoint PPT Presentation
The acquisition of Fortitech Accelerating DSM s strategy to become a full solutions provider in food ingredient blends Investor Relations 8 November 2012 Overview Fortitech at a glance Acquisition rationale S lide 1 Transaction
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Transaction highlights Fortitech
- Total ent erprise value about US
$634 million (~ €495 million), in an all cash transaction
- 2013 expect ations: net sales ~US
$270 million, EBITDA ~US $70 million, including synergies and excluding except ional it ems
- Value creat ing acquisit ion; EPS
accretive in 1st full year
- Subj ect t o cust omary condit ions, t he t ransact ion is expect ed t o close in 2012
Acquisition
- Fort it ech adds a st rong posit ion in cust omized food ingredient blends which:
- Expands DS
M’s value chain presence
- Allows DS
M to offer complet e solut ions to its customers
- Increases cust omer int imacy
Strategic fit
- S
ignificant cost synergies est imat ed at ~10%
- f net sales, fully realized by 2015
- One-t ime synergies estimated at ~US
$70 million, primarily by capex avoidance
Synergies
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Fortitech, global leader in food ingredient blends
Food ingredient Blends
- Broad range of food ingredient blends based
upon ext ernally sourced nut rient s and food ingredient s, including : vit amins, minerals, amino acids, colors, nucleotides, sweeteners, nut raceut icals, herb ext ract s, flavors, seasonings, caffeine, proteins, carbohydrat es and enzymes
- Abilit y t o produce finished consumer product s
in complete blends Customization
- Wit h any nut rit ional & food ingredient
- More t han 1,400 ingredient s
- Carefully tested and qualified
Covering a wide range of key markets
- Food & Beverage
- Infant nut rit ion
- Diet ary supplement s
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Food ingredient blending
Formulated product
Flour whey proteins vitamins flavors seasonings herbal extracts colorants enzymes emulsifiers hydrocolloids cultures preservatives Flour soy prot eins trace met al (chelates) modified starches Flour starches Flour dried fruit Flour dried vegetables Flour botanicals Flour sugar Flour sweeteners yeast extracts Flour S alt & minerals Flour calcium
Agricult ural product s
carot enoids Flour fibers
Micro- ingredients & premixes Macro- ingredients Commodities
focus DS M focus Fortitech
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Fortitech at a glance
Revenues expectation FY 2013:
- Net sales ~US
$270 million
- EBITDA ~ US
$70 million, including synergies and excluding except ional it ems
- ~9 EV/ EBITDA mult iple
Founded in 1986
- Private company with ~520 employees
- Headquart ered in Schenect ady (US
A)
- 6 product ion sit es: US
A (2), Brazil, Denmark, Poland and Malaysia
- 2 sales offices: Mexico and China
Fortitech is present in all major regions
53% 13% 18% 16% North America Asia Europe Latin America
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Global production network of Fortitech
California (US ) S ao Paulo Kuala Lumpur Poznan (Poland) Nilose (Denmark) New Y
- rk
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Overview
S lide 7
- Fortitech at a glance
- Acquisition rationale
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Strong growth in food ingredient blends
Increased demand for complete solutions
- From vitamin & carotenoids premix t o complet e
food ingredient solut ions using mult iple ingredient cat egories
- Increased complexit y and high qualit y
requirements
- High single digit growt h rat es at at t ract ive
EBITDA margins around 25% Providing multiple benefits to customers
- Lower purchasing and invent ory cost s
- Reduced capex, equipment maint enance & labor
cost
- Lower testing costs and qualit y risk
- Increased out put and efficiency
- Accelerat ed product development
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Further strengthening our value chain presence
Fortitech Martek ONC Microbia Vitatene Tortuga DSM
Forms & delivery systems Active ingredients Premix Macro Blends Nutritional consultancy & services
Human Nut rit ion & Healt h Animal Nutrition & Health
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Acceleration to a full solutions provider
Large food
companies
Blends Cust om Packaging Premix Cust om Blends & packaging Forms & Delivery syst ems Act ive ingredients
In-house blending by cust omer Customer solut ion driven
Premix
Ingredient s channel-t o-market
Core competencies
DSM
- Backward int egrat ion int o key ingredient s
- Ext ensive innovat ion/ applicat ion know-how
Fortitech:
- Highly responsive customer service model
- Abilit y t o manage highly complex solut ions
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Cost synergies estimated at ~10%
- f net sales
Significant cost synergies
- About 10%
- f net sales which
will be fully realized by 2015 In addition, one-time synergies
- About US
$70 million primarily in capital expenditure avoidance Combined plants & blending footprint
El Salto Belvidere
Village Neuf
Niløse
Singapore Shanghai São Paulo New York California Bogota
DSM plants Fortitech plants
Baroda Isando Kuala Lumpur Poznan (Q4’12)
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SLIDE 13 Thi s im
DSM continues to expand its unique position in Nutrition
1 2 3 4 5
2007 2010 Current *
Personal Care Animal Nutrition & Health Human Nut rition & Health Food S pecialties
Expansion in food & feed (Sales € bn)
* Two t imes 2012 H1 plus pro-forma sales Fortitech, ONC & Tortuga
- 9th acquisit ion in Nut rit ion since
announcement of st rat egy in Sept ember 2010:
- ~€ 2.4 billion spent on acquisit ions
in Nut rit ion
- Including Fort it ech, Ocean Nut rit ion
Canada and Tort uga, t he Nut rit ion businesses will have:
- About €4.6 billion net sales on an
annual pro-forma 2012* basis
- 20-23%
EBITDA margin
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Wrap up
Fortitech acquisition:
- Fully support s DSM’ s growt h st rat egy “ DSM in mot ion: driving focused growth”
- Accelerates DS
M’ s st rategy to become a full solut ions provider in food ingredient blends
- Expands DS
M’ s value chain presence
- Creat ing significant cost synergies of ~10%
- f net sales, fully realized by 2015
- With one-t ime synergies of ~US
$70 million, primarily by capital expendit ure avoidance
- A value creating acquisition; EPS
accret ive in the 1st full year
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Disclaimer
- This document may contain forward-looking statements with respect to DS
M’ s future (financial) performance and
- position. S
uch statements are based on current expectations, estimates and proj ections of DS M and information currently available to the company.
- Examples of forward-looking st at ements include st at ements made or implied about t he company’ s st rategy, est imat es
- f sales growth, financial results, cost savings and future developments in its existing business as well as the impact
- f future acquisitions, and the company’ s financial position. These statements can be management estimates based
- n information provided by specialized agencies or advisors.
- DS
M cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause the company’ s actual performance and position to differ materially from these statements.
- These factors include, but are not limited to, macro-economic, market and business trends and conditions, (low-cost)
competition, legal claims, the ability to protect intellectual property, changes in legislation, changes in exchange and interest rates, changes in tax rates, pension costs, raw material and energy prices, employee costs, the implementation of the company’ s strategy, the company’ s ability to identify and complete acquisitions and to successfully integrate acquired companies, the company’ s ability to realize planned disposals, savings, restructuring
- r benefit s, t he company’ s ability t o identify, develop and successfully commercialize new products, markets or
technologies, economic and/ or political changes and other developments in countries and markets in which DS M
- perates.
- As a result, DS
M’ s actual future performance, position and/ or financial results may differ materially from the plans, goals and expectations set forth in such forward-looking statements.
- DS
M has no obligation to update the statements contained in this document, unless required by law. The English language version of this document is leading.
- A more comprehensive discussion of the risk factors affecting DS
M’ s business can be found in the company’ s latest Annual Report, a copy of which can be found on the company’ s corporate website, www.dsm.com
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